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Clive Adamson, director of supervision for the conduct business unit of the FSA, said the regulator’s obsession with disclosure at the point of sale confused rather than helped consumers.

In a speech at the Marketforce and Institute of Economic Affairs’ 15th annual conference, Mr Adamson said the FSA’s point of sale requirements created situations where substantial amounts of information were being provided to consumers who not always understood what was being presented to them.

This, he said. combined with sales processes that often incentivised staff to sell products that were profitable to the firm rather than suited to the consumer, made it almost inevitable that detriment took place.

Mr Adamson said: “I want to make it clear that our aim is not to take away the consumers’ responsibility. We want them to make decisions for themselves, but ensure that the decision they make is an informed one. This is where you, the industry, come in.

“Both the Retail Distribution Review and regulatory reform give us all huge opportunities to do things better.

“To give consumers more confidence in the advice they are receiving, it is important that advisers look at their customers as unique individuals, consider their personal situations and fully understand their objectives and potential financial needs.”

According to Mr Adamson, questions that advisers should be asking themselves are:

* Have you decided if you are going to be independent advisory or restricted?

* Is your pricing structure clear?

* Do you have the systems in place to ensure your clients fully understand how your advice translates into costs?

* If you are advising on high-risk investments, do the individuals providing that advice have sufficient understanding of the products being offered?

* Are you looking at undertaking a wider range of business? If so, have you identified all the risks associated with these products?